For a decade, this strategy was effective -- for North Korea. Periodic missile and nuclear tests and military provocations served as reminders to keep the checks coming. South Korean governments cooperated fully, hoping to avoid instability at nearly any cost. It was the perfect test of a policy of eager engagement and pre-emptive bribery. In practice, it rewarded and encouraged extortion, proliferation and destabilizing North Korean tantrums.
The election of South Korean President Lee Myung-bak in 2007 marked a shift. The ATM policy ended. The south has promised large-scale payments only if North Korea abandons its nuclear program. While China still supplies most of North Korea's oil and food, hard currency is getting harder to come by. Arms shipments are watched. Funds from North Koreans living in Japan have dried up. South Korean officials estimate that Kim Jong Il is now getting perhaps $700 million a year in hard currency -- not a particularly good haul.
But there are limits to the policy of isolation as well. Given that North Koreans did not revolt when millions were dying of starvation in the mid-1990s, it is difficult to imagine that economic pressure alone will bring down a committed, completely ruthless regime that cares nothing for the opinion of the world or the lives of its own people.
The most fragile thing about the North Korean regime is the structure of deception that supports it. Its main vulnerability is internal and ideological. Its propaganda appeals to nationalism and racial pride. But the regime has made North Korea a laughingstock while another Korea is the envy of the world. It pretends to socialism. But North Korea is ruled by a privileged class of unimaginable excess.
In addition to a policy of economic isolation, it would be worth trying a policy of ideological exposure -- an aggressive, patient, well-funded information assault by South Korea and the United States. Clandestine distribution of radios and cell phones. Video exposure of the gulags. History texts on flash drives for the educated. Information on the decadence of the elite for the common folk.
Other options have failed. We should test if the North Korean regime can survive the collapse of its lies.